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Denny’s Corporation Reports Results for First Quarter 2021

Published: 2021-05-04 20:05:00 ET
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SPARTANBURG, S.C., May 04, 2021 (GLOBE NEWSWIRE) -- Denny’s Corporation (NASDAQ: DENN), franchisor and operator of one of America's largest franchised full-service restaurant chains, today reported results for its first quarter ended March 31, 2021 and provided a business update on the impact of the COVID-19 pandemic on the Company’s operations.

John Miller, Chief Executive Officer, stated, “We entered 2021 confident in the resilience of Denny's given the strength of our franchisees and team that continues to persevere and deliver a great experience to our guests. Our initial optimism is now being supported by sequential sales improvements, as our dining rooms have reopened in various capacities with the increase of vaccine distributions. The easing of dine-in restrictions, coupled with fiscal stimulus and the rollout of our new virtual brands, have resulted in our same-store sales trending toward pre-pandemic levels."

First Quarter 2021 Highlights

  • Total Operating Revenue was $80.6 million.
  • Domestic system-wide same-store sales** decreased 20.0% compared to the equivalent fiscal period in 2019.
  • Domestic system-wide same-store sales** decreased 9.7% compared to the equivalent fiscal period in 2020.
  • Opened three franchised restaurants, including two international locations.
  • Operating Income was $5.5 million.
  • Franchise Operating Margin* was $23.2 million, or 49.5% of franchise and license revenue, and Company Restaurant Operating Margin* was $3.4 million, or 10.1% of company restaurant sales.
  • Net Income was $23.2 million, or $0.35 per diluted share.
  • Adjusted Net Income* was $0.5 million, or $0.01 per diluted share.
  • Adjusted EBITDA* was $11.8 million.
  • Cash provided by operating, investing, and financing activities was $10.2 million, $0.2 million, and $0.2 million, respectively.
  • Adjusted Free Cash Flow* was $5.2 million.

Current Trends

Domestic system-wide same-store sales** sequentially improved on a monthly basis during the first quarter ended March 31, 2021, compared to the equivalent fiscal periods in 2019. This is due to expanding vaccine deployment which has led to the easing of stay-at-home orders and capacity restrictions. As the number of Denny's restaurants operating with open dining rooms steadily improved to 98% of the domestic system, off-premise sales have remained strong.

Additionally, the Company began a phased rollout of its first virtual brand, The Burger Den, during the first quarter. In April 2021, the Burger Den rollout was substantially complete at over 1,100 domestic locations, and the Company began the phased rollout of its second virtual brand, The Meltdown. Transactions for these two virtual brands are highly incremental and leverage labor during underutilized dayparts.

Furthermore, subsequent to the end of the first quarter, the Company paid down an additional $15 million on its revolving credit facility bringing the outstanding balance as of April 30, 2021 to $200 million.

In an effort to provide greater transparency due to the COVID-19 pandemic, Denny's is providing the following tables that present monthly results for 2021 compared to the equivalent fiscal periods in 2019:

Domestic System-Wide Same-Store Sales**Compared to 2019 Fiscal Periods and Domestic Average Units for 2021 Fiscal Periods

 Domestic System-Wide Same-Store Sales** 
 Fiscal Year 20211 
 JanFebMarApr 1 
System(31%)(25%)(9%)(2%) 
      
Open Dining Rooms(15%)(17%)(5%)(2%) 
Closed Dining Rooms(55%)(40%)(23%)(7%) 
      
24/7 Units(20%)(16%)2%11% 
Limited Hour Units(38%)(32%)(16%)(11%) 
 1. April results are preliminary. 

 Domestic Average Units 
 Fiscal Year 20211 
 JanFebMarApr 1 
System1,5041,5011,5011,498 
      
Open Dining Rooms9271,0381,2531,472 
Closed Dining Rooms53142222815 
      
24/7 Units519532569565 
Limited Hour Units939928912922 
      
Temporary Closures46412011 
 1. April results are preliminary. 

 Domestic Capacity Restrictions as of April 30, 20211:
 % of Domestic System
 75% Capacity or Social Distancing39%
 50% - 66% Capacity29%
 25% - 33% Capacity9%
 Off-Premise Only1%
 No Restrictions22%
 Temporarily Closed